Could modular homes be an answer to the housing crisis?

Since I wrote a book about the housing crisis last year I have been regularly contacted by people affected by it. Week after week, the stories of heartbreak, fear and frustration keep coming. Recently, they have included the mother with two young children who was evicted by her landlord, and then told by the council there was no accommodation. She since got B&B emergency accommodation, adding to the 1,839 families homeless across the country.

There was the couple facing fertility issues, who told me they felt this was exacerbated by chronic housing stress. And the woman of retirement age who said she lived in fear of eviction. The medical student I saw pleading on social media for a floor to sleep on. The parent whose two adult children are emigrating, because “there’s no future in Ireland for the young”.

This is just a snapshot of Ireland’s housing catastrophe. It is clear we need urgent action and creative solutions.

There is a way we could quickly increase the supply of homes that has received surprisingly little attention: fast factory-built housing. Based on modern methods of construction (modular, timber and steel frame, etc), factory-built housing could rapidly provide a supply of well-designed, environmentally sustainable homes at lower cost.

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By applying modern industrial techniques, and using low- and zero-carbon materials, including renewable and recycled materials, prefabricated homes can be built in a factory in timelines from one to 12 weeks and, once the site is prepared, assembled in days. Compare that with a minimum of 18 weeks for a traditionally built house. Factory-built homes also produce about 70 per cent less carbon.

Labour shortages are less of an obstacle as this type of housing requires fewer workers per home to build, and does not require their constant relocation.

Such prefabricated, modular housing – in particular timber-framed homes – has been used successfully for a long time in Scandinavian countries and has expanded rapidly across Europe in recent years.

Modern modular housing is not the cold prefabs of old that you might have seen put into schools. It is beautifully designed, of the highest quality build, and built to last. Take a look at the affordable housing built through timber frame in Rotterdam, or the new modular social housing provided by Birmingham City Council.

In England, a new modular homes factory is being developed to build 4,000 homes a year. Just one factory building 4,000 homes. The numbers are staggering.

The Government recently published a “roadmap for increased adoption of Modern Methods of Construction (MMC) in Public Housing delivery”, which includes initiatives such as the “commencement” of 1,500 social housing units via MMC by the end of 2024.

But while the intention is good, these targets are inadequate and lack ambition, and delivery is once again dependent on the market. Seven hundred modular homes are planned by the end of this year for those seeking safety from war in Ukraine. Unfortunately, delays and opposition have hit some areas. Mayo County Council has provided 28 modular homes at a cost of €145,000 per unit, and is exploring its potential for those affected by pyrite.

One- and two-bedroom homes can be built for €100,000-€150,000 turnkey. Doing this at scale would reduce costs further. Cheaper to build, they can be sold at lower prices and rents. If we rapidly expanded factory-built housing, we could provide tens of thousands of public affordable rental and purchase homes on our huge State land banks.

Private developers see the potential, and some are using MMC. But we haven’t seen their reduced cost of production being passed on in lower house prices. The evidence from the UK and here suggests a reluctance of the private construction and finance industry to invest in factory build because market risk is deemed too high. Factories need long-term guaranteed construction levels to ensure orders. But the Irish property market and construction industry, as we have seen, is volatile, characterised by boom and bust.

A more sceptical perspective might suggest the reluctance of large developers to invest in factory building is because they do not want to see the market flooded with cheaper housing. If so, the Irish housing market has become a dysfunctional oligopoly, dominated by a small group of developers and investor funds.

Worryingly, we are seeing signs of a fall in house building, according to both the CSO and BNP Paribas Construction Indexes. There is clear market failure.

Why are we leaving the delivery of this fundamental need up to the profit viability assessments of private developers and investors? Is it because it has yet to grasp the true scale of housing need? The 535,000 young(ish) adults stuck living at home, for example, are not included in housing plans. Housing for All is based on insufficient targets of delivering 33,000 homes per year when the real need is 50,000-60,000.

Or is the State reluctant to embrace a new approach of housing delivery that would disrupt existing market dynamics and affect certain interests?

Based on UK figures, the cost of building a factory capable of producing 2,000 homes a year is €100 million. By that measure, by investing just €500 million, the Government could develop five factories that would produce 10,000 homes a year. The upcoming budget should allocate part of the budget surplus to this. This investment would give us a guaranteed capacity to deliver social and affordable homes into the future. A national home-building agency could co-ordinate and deliver this, as I proposed here before. Rather than using public money to subsidise private developers to provide affordable housing that isn’t actually affordable, or extending shared equity schemes that will further inflate house prices, the State should invest in creating the public capacity to guarantee a permanent supply of housing.

In the interim, there is also a substantial supply of modular housing that could be imported from Europe. An industry expert puts the figure at 6,500 excess modular supply the Irish Government could purchase. Through fast factory-built housing we can provide the homes to give our young people a future and help meet climate targets. We have the finance, we have the land. Let’s produce the homes.

Dr Rory Hearne is associate professor in social policy at Maynooth University and the author of Gaffs: Why no one can get a house and what we can do about it